Dorff, Contracts I, Fall 2014.

Introduction

In contract law and some other cases – Identify parties not by “plaintiff v. defendant” but by owner v. builder.Offeror – master of the offer. He controls how the offer is to be accepted. Revocation clause also can be stated.

Acceptance of an offer is effective on DISPATCH.Revocation effective upon receiving.

When Offer expires and Offeree sent acceptance letter – THAT MAKES for a NEW OFFER.

NORMILE v. MILLER 8/4 B1 – offer, must accept by 8/5 @ 5pm 8/4 S – changes offer, sends back. COUNTER OFFER – Rejection of original offer.

o B1 thinks it is an OPTION offer. Waits, thinks. 8/5 (midnight) –Broker goes to B2, B2 makes and offer. 8/5 (morning) – S accepts B2 offer. 8/5 Broker to B1 – you snooze you lose. Revoked offer.

o Can B1 accept after the learning that the land has been sold?o Does it mean REVOCATION?o B1 learned from a credible source that the offer has been revoked. CAN REVOKE BY

CONDUCT. Sell land to someone else for example. Counts as revocation. 8/5 B1 Accepts

Rules:

o Offers may be revoked until acceptedo Revocation may be by words or conducto Revocation must be communicated, but not necessarily by offeror – any credible source will

do!If two get in:

Specific performance.o B1 and B2 suing for specific performance. First in time – first in right!o B2 will get land, B1 gets damages

Expectation damages.

Rejected offer – is gone. Acceptance is a new offer.Common law – mirror rule, if not identical – it is a counteroffer.

PATTERSON v. PATTBERG – Classical approach. Patterson – landowner in Brooklyn. Borrowed $$$. Mortgage.

4/4 – loan of $5,450 left on Loan.

o Lender makes an offer: if you pay in full and make interim payments by 5/31, I will discount by $780.

5/? – Borrower, Patterson, tries to repay mortgage, comes to Lender’s house.o Lender REVOKES (sold loan to someone else), did not let borrower knowo Borrower did everything right. Lender REVOKES at the LAST SECOND.o LENDER WINS – he revoked transaction before the deal was COMPLETE.

ISSUE: What counts as an acceptance in a unilateral CONTRACT offer?

o This offer REQUIRES COMPLETANCE ON OFFEREE’S SIDE. IF YOU COMPLETE THIS, I WILL DO THIS. ACCEPT BY PERFORMANCE – UNILATERAL CONTRACT.

(ACCEPT BY A PROMISE – BILATERAL CONTRACT)(ACCEPT BY PERFORMANCE – UNILATERAL). I will give you $ if you cross the bridge. If you CROSS THEN I WILL DO IT! CAN REVOKE BEFORE THE BRIDGE WAS BUILT.Modern approach – Start performance = CANNOT REVOKE!

Acceptance possible by starting performance.

Authority

o Actual Authority Principal communicates to Agent – you have authority. Agent has actual

authority.o Parent Authority

Principal tells to the THIRD PARTY – he got authority.o Agent cannot give authority to third party.

Contract Formation – Mutual Assent

Objective approach – in finding if there is a contract. Ray v. William – signed forms more than once. Should have known what they were singing and should have read it.

Subjective test – if used, no meeting of the mind = no contract.

PROMISE CLUES: Formality Reliance Benefit in exchange/deal

OFFER: Statement of willingness to deal that indicates all the listener has to do to make a deal – SAY YES.

Reasonable person standard – if reasonable person will not see this as an offer = no offer.

Advertisement – Majority: Almost never, only when very specific. In some cases as punishment. Minority: if you can answer ad with a YES.

Reasonable person approach. When small print contradicts big – not good.

MODERN APPROACH Offeree can accept by acceptance or by action. Invitation of promise or performance SECTION 45 of the restatement:

o In order to have contract, an option contract, we need consideration.o HYPO 33. Under section 45 Rich cannot revoke offer when POOR began performance.o UNDER CLASSICAL – Rich can revoke.

o Under MODERN: WHEN POOR starts performance – RICH IS BOUND, but POOR is not.

MUTUALITY of OBLIGATION – Classical, both parties are bound. POOR freezing an offer by starting going, but then takes a pause, 6 months.

REASONABLE TIME. OFFER IS NOT FROZEN FOREVER. ONLY FOR REASONABLE TIME. REASONABLE EFORT TO COMPLETE THE PERFORMANCE.

Needs to have consideration? OPTION CONTRACT.

Postponed Bargaining

§ 2-305. OPEN PRICE TERM.

(1) The parties if they so intend can conclude a contract for sale even though the price is not settled. In such a case the price is a reasonable price at the time for delivery if

(a) nothing is said as to price; or (b) the price is left to be agreed by the parties and they fail to agree; or (c) the price is to be fixed in terms of some agreed market or other standard as set or recorded by a third

person or agency and it is not so set or recorded.(2) A price to be fixed by the seller or by the buyer means a price for him to fix in good faith.

(3) When a price left to be fixed otherwise than by agreement of the parties fails to be fixed through fault of one party the other may at his option treat the contractas cancelled or himself fix a reasonable price.

(4) Where, however, the parties intend not to be bound unless the price be fixed or agreed and it is not fixed or agreed there is no contract. In such a case the buyer must return anygoods already received or if unable so to do must pay their reasonable value at the time of delivery and the seller must return any portion of the price paid on account.

o Reasonable price at delivery.o Tell someone “You decide the price,” is ok. Gives complete discretion to set the price.

GOOD FAITH CONCEPT. If seller sets the price 10 times the market times – NOT GOOD FAITH What if 1.5 times? Could be OK, but if judge feels it’s not…it’s not. Whatever delivered in advance – got to be returned if contract canceled. Down payment

as well. OR RETURN reasonable value of that.

Letters of intent are enforceable only if the parties intend them to be contractually binding

Quake Construction, Inc. v. American Airlines, Inc.o Parts of LoI can be binding, parts are not. Unclear, etc.

Consideration

Can be ridiculous – a dollar for a house, but it must be INTENDED. Not bull shit.

FROZEN OFFER – can freeze an offero Unilateral K offer

Doesn’t want promise, wants performance. Here, reasonable time given for offerror to tender the performance or starts the performance. Any of these will freeze an offer for a reasonable time and will find it unrevokable for the time being.

OPTION CONTRACT. Contract to keep an offer open.o Requires mutual assent and consideration.o CONTRACT TO KEEP an offer open for some Set timeo Can make a contract to keep an offer open.o Then can have second contract. Underlying one.o Consideration is different for option contracts.

Acceptance is also different.o Mailbox rule – Acceptance in Option Contract is only upon receipt.

Mailbox rule is to provide reliance for offerror. In Option Contract offer is frozen, so it doesn’t matter that while letter travels – an offer can be taken by someone else…

o Consideration – Nominal Consideration. Dollar for a race horse worth 1 million.

In real life deal NOMINAL CONSIDERATION deal is not going to FLY. Although FAIRNESS is not policed, but FAKE consideration is policed.

Sincerity of the deal is important. In Option Contract this can fly.

Restatement section 87(i) – offer in a signed writing proposing a fair exchange that says it will be held open, will be, if it recites a purported consideration. For UNDERLINED DEAL (not option contract) it will not be good.

Minority rule, and is not popular.o Option contract can be terminated in mutual agreement, redoing of the contract

Option contract – to freeze an offer. To keep offer open as long as parties agree to.

Nominal consideration – inended as consideration, will count for Option Contract, although not good for regular contract.

Acceptance MUST be received to have a CONTRACT.

Rejection does not terminate the OFFER in OPTION CONTRACT. You pay to have the offer open.

Rejectiono Terminates power to accept.

o Cannot accept after rejecting. But acceptance after rejecting – is a new offer.o In option contract – you bought a period of time for offer to be frozen.

You may even say throughout that period that you reject, but still can say Yes in the end.

Illusory promises:

DO NOT COUNT AS CONSIDERATION. “If I feel like it.”o This promise in this case because NOT ILLUSORY over time as HE KEPT WORKING.

THIS became not ILLUSORY over time.o “If you continue to feel like to work – then it turns into consideration.”

“I will buy all wheat that I need from you.” Requirement contract. ILLUSORY promise. PEOPLE kept making them and treated them as real. SO COURT made them binding. IF THIS BUYER WILL NEED IT – HE WILL HAVE TO BUY IT FROM THIS SELLER FOR THAT PRICE. IF HE DOESN’T NEED IT – doesn’t have to buy.

“I will sell you all the wheat I produce at $100/bushel.” Seller has to sell if he grows anything. OUTPUT CONTRACT – binding contract and is CONSIDERATION.

Employer promised employee $$$ as a pension. Conditional gift. Workers provided no consideration (No detriment).

Contract Formation under the UCC

UCC §2-204(3). If the parties intended to form a binding contract and they have agreed to

sufficient terms to make it possible for the court to order a remedy, the contract exists even

though there are some open terms.

Formation Under UCC Article 2

a. Offer

i. Article 2 governs sale of goods b/t merchant-consumer, merchant-

merchant, consumer-consumer

1. Merchant

a. One who deals in goods of this kind/deals in biz

b. Job indicates special skills/knowledge about goods of this

kind

c. Principal who hires agent who qualifies under 2

ii. Predominant Purpose test for goods & services

1. If predominantly for goods UCC

2. Look at

a. Language of K

b. Nature of biz of supplier

c. Intrinsic worth of materials

iii. UCC 2-204: Formation in General

1. K for sale of goods can be made in any manner sufficient to show

agreement, including conduct recognizing existence of K, oral

agreements

2. If enough certainty for ct to determine damages & intent to make K,

K can exist even w/ open terms & uncertainty about when K was

formed

 Merchant: narrow definition: (1) deal in goods of that kind, (2) hold yourself out as an expert, (3) hire an expert in these goods (for bar). Broad Definition: any person in business. (we care about this on in class).

Firm Offers

UCC 2-205: Firm Offers, IRREVOCABILITY

3. Offer by merchant to buy or sell goods must be in signed writing

assuring it will be held open (irrevocable/frozen) for stated time, or

reasonable time not exceeding 3 months, even w/o consideration

4. Only offeror has to be a merchant.

iv. Price quotes usually not offers unless reasonably shows that only assent

needed to make it a K

Offer, merchant, buy/sell goods, signed writing, says offer “will held open” for a time. Only offeror needs to be a merchant. If meet all the requirement then no need consideration. If not time is not stated then will be held open for a reasonable amount of time. (A cap of three months) This is the best you can do without consideration if you have none.An offer by a merchant to buy or sell goods in a signed writing which by its terms gives assurance that it will be held open is not revocable, for lack of consideration, during the time

stated or if no time is stated for a reasonable time, but in no event may such period of irrevocability exceed three months; but any such term of assurance on a form supplied by the offeree must be separately signed by the offeror.

Battle of the Forms

2-207(2). 2-207 applies in: Oral contract turned into a written one later; Or BATTLE of the forms.

Start with the terms of the offer

Article 2 – first shot rule. Express agreement – I see that specific term and I agree.

o IN WORDS. Not in conduct. OR I performed that specific form.o Between merchants…

Go term by term

Is the material term –its out. If it was objected – it is out, not in a contract.

Qualified Acceptance

At common law, an offeror who proceed under a contract after receiving a counteroffer can accept the temrs of the counteroffer by performance.

o PRINCES CRUISES, Inc. v. General Electric Co. COUNTEROFFER – last acceptance dictates…

If acceptance is strict – a counteroffer if one wants to add terms. – My way or Highway

Counter offer – always goes back to start.

Offer but no acceptance – parties often talk as if they had an agreement. Pay attention to the terms of price, goods, etc. But not look at warranty, time to object.

When they do exchange – they have a contract. If not – they have just a counteroffer.

Brown Machines v. Hercules

UCC 2-207. Indemnification issue – Liability clause. Buyer liable for any flaws in the machine. Nov. MF -> price quote and with terms, including ^ Price quote not normally an OFFER.

Not parties’ intent. But it is not impossible for a quote to be an offer. If UCC is not answers – common law does. UCC does not define offer, Common Law does – all you need to say is YES.

o Expiration of this. NOT a FIRM offer, not sticky. CLAUSE: This is not an offer. We have to agree if you like it. No contract until you AGREE.

Jan 7th Buyer phone call – didn’t want to pay a deposit. Purchase order had no Indemnity Clause and also no deposit. MF – deposit is mandatory. Could be a contract and confirmation later. Bud did not happen this time.

o Court – there was no oral contract here. Where arguing back and forth. Negotiations – custom of the industry for negotiating and have a written confirmation. Though could be oral contract.

o MF – waiting for purchase order from Jan 14th Buyer’s Purchase order. Strict. NO LIABILITY TERM in there. Strict and has no

indemnity clause. Jan 20th MF – admits that received Purchase Order Jan 21st – MF sends invoice for deposit. Accepts here. Or… Feb. 5th MF order acknowledgment. Sends signed paper INCLUDING indemnity Clause.

HERE. But sends with indemnity clause!!!! Feb 9th – buyer says Fix Specifications. All other specifications are OK. April (?) – MF requested full payment.

o Someone got injured. Sues Manufacturer – MF says BUYER YOUR responsibility. MF settles the case and sues BUYER – pay us legal fees and for liability.

o ISSUE: Is indemnity is a part of this contract?o Article 2.

Figure out now – which is an OFFER and which is ACCEPTANCE.

Trap statutory language – Strict. My way or highway.

o NO DEAL UNLESS AGREE TO THESE TERMS. Acceptance strictly conditions on these terms. ACCEPTANCE here was NOT STRICT. No Strict Acceptance – YES for contract.

20% deposit:

NO EXPRESS AGREEMENT here to this term – “I see it I agree to it.”

o Performance – agreement for express agreement? Term BY TERM. NO. PERFORM particular term 20% – than it is acceptance.

Four Hurdle Rule or Express agreement.

Are these parties are Merchants? – People in business. THEY ARE MERCHANTS.

Was the offer strict?

Yes. Strict conditions. YOU MUST AGREE TO THESE TERMS.o No additional terms are part of the deal.

Materiality. If we included this clause – it will be surprised or will make HARDSHIP to other party IF INCORPORATED WITHOUT NOTICE.

A clause negating standard of warranty. A clause requiring of 90-100% of delivery… 10 days usually to make in Industry to think – 24 hour making is MATERIAL.

Those that do not have material surprise.

SELLER – If something unexpected and beyond control occurs – can cancel. Clause cancel within reasonable time… Clause to reject for defects? Within customary limits.

In this case: MATERIAL. Surprise – hardship as well. It was previously objected to.

Objection can be before or within reasonable time after acceptance.o Objection before – WILL COME IN OFFERS that COME as well. Offer’s term is strict?

Objection.o Good drafting – say they will not accept all terms that are NOT INCLUDED IN THIS

OFFER. This allowed.

INDEMNITY is not in there – STRICT OFFER + MATERIAL + OBJECTED. All you need is one strike, here are THREE. THIS TERM IS GONE!

Hypo 57

No contract. STRICT ACCEPTANCE response. If PARTIES PERFORMED – THERE WAS A CONTRACT – but KNOCK OUT RULE 2-207(3) APPLIES. These knock each other out, goes to UCC – there is warranty.

No Warranty term is MATERIAL. Objection in the OFFER.

o Material and Objected to. Term gone under 2-207(2).

Hypo 60

Yes for contract. NO IF NO PERFORMANCE, which is acceptance. Yes, strict acceptance.o KO rule. Warranty OUT under UCC. Background terms of UCC. Implied

warranty.

IMPLIED WARRANTY OF MERCHANTABILITY – KNOW IT.

Problem 2-6

General contractor and Supplier of material. Exchange of Forms for ROOFING Materials. UCC applies. Doesn’t matter if they are merchants.

o October 1st – Buyer FAX to seller – we want Order, delivery by November 15. I want roofing material

o Same day later – Seller FAX to buyer - you can have them, Subject to terms and conditions.

10% deposit. Seller will notify buyer if there are any delays, and it is not done within 60 days

of order. Seller NOT LIABLE.o October 7 – BUYER sends 10%.o November 4 – Seller – delay 30-45 days.

Buyer asks to get out of deal. If you try to get out – we will sue you and keep your 10%.

Buyer asking advice if he has legal right to cancel a deal. CONTRACT – promise binding. Promissory estoppel. Article 2 UCC applies. IS THERE A CONTRACT? 2-207 – YES CONTRACT. “BATTLE OF THE FORMS”

o Which one is offer? BUYER’s PURCHACE OFFER.o ACCEPTANCE – SELLER’s FAX.o Sounded about right ^

ACCEPTANCE – Not strict. SUBJECT TO. NOT STRICT. WE HAVE A CONTRACT.o Subject to is NOT ENOUGH.

WHAT ARE THE TERMS OF THIS CONTRACT?o Two ways to get terms in – Express agreement (I see and I agree) or FOUR HURDLE

RULE 2-207(2). Is delay TERM part of a contract?

o NO EXPRESS AGREEMENT.o Buyer did not perform it.o Buyer SENT CHECK of 10%. Expressely performed. CANNOT BOOT STRAP TO

THE OTHER TERM!!!!o LOSING ARGUMENT – Buyer did not AGREE to that term.o FOUR HURDLE RULE:

Merchants? YES. Is the offer strict? NO. (not really known) Is this TERM material? What is industry custom? If it is within – it is FINE. If it

isn’t – NO. We do not know industry custom. Talk about it on EXAM.

Not likely to be in. Material. My guess.

2-6 (187).

No express agreement -> “I see that rule, I agree to it”

From there, going into 4 hurdle rule – whether the rule is in or out.o Material?o Surpriseo Custom – IF term is too far from industry custom.

Not too far from industry custom – OK In this case – NO INDUSTRY CUSTOM found to make it clear. 60 DAYS DELAY – in construction – way too long.

Material, Knocked out. Terms:

o Term 1 – 10% payment – paid in full, agreed by performance.o Term 2 –*1 No express agreement. 4 hurdles rule used:

No objections, use MATERIALITY – Interest on late payment is OK – but reasonable, within industry norms. 1% per months OK, 100% a day is NOT. 1% a month is probably OK.

o Term 3 – Normal. If I come to collect money from you – you will be liable for feeso Term 4 – Arbitration clause. Standard.

There are federal rules liking arbitration. THIS CLAUSE IS OK.o Term 5 – Seller provides warranty – OK.

Disclaimers of warranty often not OK, depends on industry custom. But +here seller adds warranty. OK.

At common law, an offeror who proceeds under a contract after receiving a counteroffer can accept the terms of the counteroffer by performance.

Performance is NOT ENOUGH, not in 2-207. I SEE THAT TERM AND I AGREE, or I SEE THAT TERM AND I PERFORM.

Electronic and Layered Contracting

a. Browsewrap

v. Enforceable only if user has actual or constructive knowledge of any agreement,

and has been at least given proper notice & access to T&C

b. Clickwrap

vi. Appears to be universally enforceable as users forced to click & aware. “I AGREE”

c. Shrinkwrap (Majority Rule from ProCD) Cash now, terms later.

vii. When merchant delivers product including T&C, but expressly provides consumer

right to accept terms or return product w/in reasonable time, consumer who retains

goods beyond that time may be bound by K

viii. Majority considers acceptance to be some period of time after product arrives,

which may include add’l T&C that buyer can accept through payment & keeping or

reject by returning product w/in reasonable time, but burden on seller to prove

buyer had accepted to terms after delivery must have explicit language saying

buyer can reject terms by returning product

ix. No 2-207 applicability

If electronic notice is buried – not binding.

Promissory Estoppel

1) Promise

2) Reliance 3) Injustice Started in families and charities

o Trying to enforce promises that would not be enforced under contract because there is no CONSIDERATION.

o With family – recognized that that is a gift. REASONABLE DETRIMENTAL RELIANCE.

Elements:o Promiseo Reasonable detrimental reliance

IMPLIED PROMISESo Most courts find that a promise can be implied by conduct.

Would be generally enforced. Not all courts, but most.

Hypo 85.

Paternity test revealed BF was not the father of the child. Sues after splitting under promissory estoppel. Test ^^^ reveals… Reliance was reasonable, there was a promise. What about JUSTICE? Mistake. Argument to not enforce P.E.: She should go find an actual child. He did that job for quite a

while. Argument for enforcement of P.E.: Signed birth certificate. Should be enforced even if signed in

mistake. Remedy can be limited as justice require. Leave them as if there was no damage. Expectation

damages in CONTRACT. But here it can be limited to paying for a few years, or a half. He shouldn’t be hooked forever.

Katz v. Danny Dare, Inc.

Employee trying to stop a thief stealing from his employer. Gets hit and injured. Employee was hospitalized and then had trouble, injuries… Made mistakes at work after

returning. Mistake cost $ to employer Employer promises to increase pension to $13.000 a year. Was sent to vacation on Hawaii. 13

months to negotiate this. Tells he can work part time for someone else. + Social Security. + pension from employer.

HIS CHECK was reduced in HALF. When he returned it, they stopped paying checks. Sues. Employee did not give Consideration to his employer AT-WILL employment. Can be fired at any time for any reason.

o Generally when asked to leave for pension under AT-WILL often is not a CONSIDERATION when one leaves.

Employee relied on this promise.o Reliance here – stopped working.

TRIAL COURT – how can he have reliance if he can be fired at any time, AT WILL.

o Employer had the RIGHT to fire him at any time, however BECAUSE EMPLOYER DID NOT FIRE AND BARGAINED RETIREMENT – then IT IS A RELIANCE ON THIS PROMISE.

Reasons he was not fired as well:o Also, he was a BROTHER IN LAW. They were related. Reason he was reluctant to fire.

Family reason.o Hero, his loyalty resulted in injury.o That is why he was reluctant to fire him.o Reliance.

Injustice: he was getting 25k a year, retired on a promise he would get 13k and would be allowed to work part time.

o Later he got better. Employer said – no 13k, come work for me. If he knew that pension was not coming to him, he could have made arrangements.

James Baird Co. v. Gimbel Bros, Inc.

GC and SC. SC bid on Linoleum. GC makes bid on that bid After GC submitted a bid, he is bound. That bid was accepted. Day after SC says they made a mistake and rescind it. General Contractor is bound if owner accepts. BID was an OFFER. CONSIDERATION? Yes. DO WE HAVE A CONTRACT? DO WE HAVE ACCEPTANCE? If GENERAL gets CONTRACT by accepting the BID – and then his BID IS DENIED – then

GENERAL and SUB have contract and there is an ISSUE > therefore>>o NO CONTRACT THERE.

Could be Conditional AGREEMENT. If GENERAL gets the job, then they accept the BID and JOB.

There was no acceptance here. Not required to use the bid.

PROMISSORY ESTOPPEL:

Promise – yes, if GC’s bid accepted. Reliance – yes, used it in their bid. Detrimental Reliance if they get the job. Injustice – no injustice here. If they wanted it – they would have bargained.

It was not their understanding. If General wanted to it to be binding – they would have contracted if BID is accepted…

One party foolishly relied on another. Bad use of promissory estoppel in this case. Not appropriate context.

Foolish to protect those who refuse to protect themselves. If they WANTED – they would have contracted. USING IT IN OWN BID IS NOT ACCEPTANCE.

o They COULD have made an OPTION CONTRACT. If bid was accepted. NO contract here. PROMISSORY ESTOPPEL

o Promise – yes.o Reliance – reliance yes. Reasonable – they had many bids, got it in the late minute,

agreed to that BID. Sub wants general to rely, because if General gets the job, Sub too.o Injustice – If reliance is REASONABLE – it will be UNJUST to not enforce.

Judge hand – create option contract. If accepted – YES agreement.

A subcontracting/supply offer may become binding if used in the contractor’s bid under the doctrine of promissory estoppel.

The promise in estoppel cases must be at least somewhat definite.• The relative sophistication of the parties may influence a court’s finding of

estoppel liability in negotiation cases.• Parties negotiating a contract may become liable under promissory estoppel even

if they never enter into a contract.

HOW TO Prevent P.E.

DO not give comments that will give reliance. Have a document – DO NOT RELY UNTIL WE HAVE A CONTRACT.

o Some judges will see it as not a valid paper. Some people will still rely.o If it’s natural to rely – not fair to enforce it.

DO not write this: We are almost there, 95% done. Go ahead and move.

Restitution

• Restitution in the Absence of a Promise

• a.       A contract implied in law is an obligation imposed by the law without regard to either party’s expressions of agreement either by words or acts. It rests on a legal fiction arising from considerations of justice and the equitable principles of unjust enrichment. Other names for contracts implied in law include restitution, unjust enrichment, quasi-contract, and constructive contract.

• Elements of an action for quasi contract are (1) the plaintiff has conferred a benefit on the defendant (2) the defendant has knowledge of the benefit (3) the defendant has accepted or retained the benefit conferred and (4) the circumstances are such that it would be inequitable for the defendant to retain the benefit without paying fair value for it.

Restatement of Restitution § 116: A person who has supplied things or services to another, although acting without the other’s knowledge or consent, is entitled to restitution therefore from the other if:(1) He acted unofficiously and with intent to charge therefore, and

• (2) The things or services were necessary to prevent the other from suffering serious bodily harm or pain, and

• (3) The person supplying them had no reason to know that the other would not consent to receiving them, if mentally competent; and

• (4) It was impossible for the other to give consent or, because of extreme youth or mental impairment, the other’s consent would have been immaterial.

• In absence of KNOWLEDGE or ACCEPTANCE – may recover under restitution if you intended to charge.

Injustice element is CRUCIAL. Intent to charge – unjust not to be paid

Refused to pay, but did sign after second attempt. Signed a piece of paper – why no contract?

o Woken-up during the night and was told if he won’t sign, he will not get his belonging back. Under duress – “we will destroy your property if you won’t sign.”

o Not in the right mind when he signed. No really consent – therefore no real CONTRACT. That is why hospital did not sue under this.

RESTITUTION:o Benefit + conferredo Knowledge of that benefito Acceptanceo Unjust to not get paid. INJUSTICE.

Restitution has many synonymous names:

Quasi contract Implied by law Unjust enrichment

o There are EXCEPTION:

Section 20: Protection Of Another’s Life or Health In emergency situation, if one helps other. Not just benefit, but PROFESSIONAL. GIVER must do this for a living,

a professional. Doctor, nurse, or EMT. Protects somebody’s life or health. To prevent the other from suffering

serious bodily harm… A pro helps someone… BENEFIT IS STILL NEEDED. If circumstances justify

intervening without request. If no knowledge or acceptance:

Section 20 Health.o Service by a professionalo To protect life/healtho Unjust enrichmento Justified by the circumstances

Impossible to get consent – mental incompetent, under legal age of consent, etc.

Section 21 – Property.o To protect another’s property from HARM.

o Entitled restitution from another to prevento Unjust enrichmento If the circumstances justified intervention without consent.

Hypo: Boat going uncontrolled down the stream. I caught it and saved it with risk to my own life. Protected property of another? Yes. Enrichment? Yes. Am I justified to get paid? Hard to say.

o The courts said professionals intended to charge initially.

Hypo:

Flat rate contract. Architect works more and more hours – client constantly changes his mind… Gets angry, wants restitution based on market value.

o NO, He cannot get restitution – THERE IS ALREADY A CONTRACT.o IF Contract goes away – you can do restitution, but NOT UNTIL THEN.

Restitution test:

BENEFIT KNOWLEDGE ACCEPTANCE INJUSTICE

Promissory Restitution Promise for benefit received – previous benefit, promise later. Binding and Enforceable to extent to prevent injustice.

Three things with this: Contracts where statute of limitation has lapsed. Too late to sue. Two years. Contract gone. Waited too long.

Debts – excused by bankruptcyo Someone promised to pay - enforceable

Debts excused by Infancy.o Infant – UNDER 18. Promise to pay under 18. Still there is moral consideration, to

pay…o Subsequent promise to pay is enforceable.o When also promise to pay when buying something.

“I had defense of bankruptcy, but I am promising to pay and waiving that defense”

“I have defense of Statute of Limitations, but I still promise to pay.”

Statute of Frauds (Common Law)

a. While oral K’s are usually valid, some K’s are so important that they must be in writing

x. Executor or administrator answering for duty of decedent’s will/estate

xi. K to answer for duty of another

xii. K upon consideration of marriage

xiii. K for sale of interest in land

xiv. K that cannot be completed w/in 1 year

xv. K for sale of goods for $500 or more (UCC)

b. Ask:

xvi. Is this K w/I SoF?

xvii. If so, is SoF satisfied?

c. Writing can be more than 1 document as long as they all clearly refer to same subject

matter or transaction & have at least 1 signed document

xviii. Must be signed by person trying to bind/to be charged

xix. Signed document does not have to have been prepared or signed w/ intent of

evidencing a K, nor does it have to be signed before K was formed

d. Documents must

xx. Reasonably identify subject matter of K

xxi. Indicate that a K bas been made b/t parties

xxii. State w/ reasonable certainty essential terms of unperformed promises

1. Material terms depend on agreement, context, subsequent conduct

a. Typically include, identity of parties, description of subject matter,

terms necessary to make K definite & enforceable

e. Promissory Estoppel’s detrimental reliance can be exception to SoF providing evidence

that otherwise would have to be in writing

COMMON LAW

Not have to be all in writing. Can put different documents together. Even a letter denying a contract is ok. “No deal” and signed. Bound!

Statute of Frauds (UCC) 2-201

xxiii. K’s for sale of goods for $500 or more

xxiv. Writing is sufficient if indicates K of sale b/t parties, is signed by party or agent

sought to be bound, and states quantity (only enforceable up to stated quantity),

even if it leaves out or incorrectly states price or material terms

1. Price can be ascertained by fair market value but quantity must be

determined by parties to be enforceable

xxv. Exceptions (to SoF defense even if no signed writing)

1. Written Confirmation B/t Merchants (only merchant exception)

a. If w/in reasonable time one merchant sends writing satisfying SoF

to another merchant, & recipient has reason to know of contents &

does not object (in writing) to confirmation w/in 10 days,

confirmation satisfies SoF for both parties no defense

2. Specially Manufactured Goods

a. If K does not satisfy SoF & the goods were specially manufactured

for buyer, & seller either began manufacturing them or entered into

3rd party K for their manufacture & can’t sell to another w/o burden,

K may be enforced

3. “Court Admission”

a. K may be enforced if D admitted existence of K under oath in some

situations

i. Court, deposition, affidavit

4. Goods or Payment Received & Accepted

If receives/accepts goods or payment, then K may be enforced Contract for $500 or more, writing required.

Some writing sufficient to indicate that contract deal was made. MUCH LESS THAN COMMON LAW (material terms).

And signed by parties or authorized agents. Writing is not sufficient if there are terms misstated. Quantity TERM HAS TO BE. Everything else is not needed. SOME KIND of DEAL proof. QUANTITY IMPORTANT + SIGNATURE.

UCC: whole bunch of exceptions.

Paragraph 2 – between merchants. (ARTICLE TWO – SALE OF GOODS).o Firm offer by a merchant.o (Between merchants, no strict offer, <4 hurdle rule)o BOTH OF them had to be merchants – BROAD – ANYONE IN BUSINESS.

BETWEEN MERCHANTS for these 1. Written confirmation exception 2. Sufficient against the sender 3. Sent within reasonable time of oral K

(Signed, shows the deal, and quantity term) 4. Recipient doesn’t have to know the contents, just need to have a reason to know. Reasonable

person would know. EXCEPTION: Recipient sends written note of objection within 10 days of receipt.

o Objection must be in writing, but not have to be signed. EXCEPTION: Three more exceptions to writing req.

o If goods are to be specially manufactured to the buyer, and not suitable to sell to others. If seller made a substantial beginning or preparation This is good evidence that it was made for this buyer.

^ Broken exceptions:

Don’t have to be merchants. SPECIALLY MANUFACTURED GOODS UNSUTABLE FOR SALE TO OTHERS, in a

regular market.o And seller, under circ that it is for a buyer, starts making it before any repudiation.

Court admission exception – idea here – you would not lie to the court. Not really physicallyo Party resisting enforcement admits in a court proceeding or pleading to the K.o Only works for the quantity admitted.

Either payment or goods accepted. (goods – if we go after the buyer, or payment – after the seller).

o Either payment was accepted, or goods themselves.o This acceptance says there was a deal.

EXCEPTION NEEDED:

Check sufficient against Seller. Quantity, for what… BUT – check was sent back – Reasonable objections. No manufacturing of special goods. GOODS WERE ACCEPTED OR PAYMENT?

Did buyer accept goods? YES. Possession of goods prior to the agreement (rental agreement). Having them – doesn’t change it.

Buyer paid for insurance – if he OWNED THEM. Maybe he taken possession?

REPAIRS – by buyer. SELLER ACCEPTED PAYMENT. Rejecting later – not good. Accepted

– ACCEPTED PAYMENT.o Satisfied by exception.o Statute of Frauds satisfied. Now who wins? Buyer HAS TO

PROVE THERE WAS A CONTRACT. Buyer met that burden.

HYPO 107

Check $10k. Widgets – goods. Sale of goods. All seller can produce.

CHECK – “for all goods seller can produce.”o Check – best possibility.o Trying to bind BUYER – BUYER SIGNED THE CHECK?o YES he signed. WRITING SUFFICIENT?

Missing quantity term? ALL WIDGETS CAN PRODUCE – OUTPUT CONTRACT. Not fixed quantity. COUNTS.

SUFFICIEN WRITING.

UCC

Sale of goods 500 or more. SALE OF GOODS. Not necessarily a merchant. Must show that there is contract. That deal was made. SIGNED. Electronic signatures count. QUANTITY TERM HAS TO BE THERE 100%!!!!!!!!!! CAN OMMIT other terms, but

QUANITY MUST BE THERE.

If we have promissory estoppel under common law Statute of Frauds?

IN COMMON LAW? if contract was outside one year windows – Promissory Estoppel will be ok. PROMISSORY ESTOPPEL IS IN COMMON LAW

o Apply only to UCC. Exceptions in UCC

o Receiving of the goods/moneyo GOODS specifically made for the buyer.o In COURT OR TESTIMONY – admit that CONTRACT WAS MADE. Up to the

quantity that was admitted.

o Merchant: ANYONE in business will DO. If one sends writing to confirm (enough against the sender), unless the

recipient objects within 10 days, meets statute of frauds. BUT has to prove there is a contract.

Common law triggers

Sale of land No more than one year.

UCC trigger

$500.

Damages

Expectation damages: The purpose of expectation damages is to put the non-breaching party in the position it would have occupied had the contract been fulfilled.

o LOSS PROFITS - $1 wholesale. Sells for $3. PROFIT $2 – which would be damages.

Reliance - $ spent by injured party either by performing or preparing to perform. Started in reliance on a promise. At least should be paid money spent. Same position as if no deal ($$$).

Restitution - $ UNJUST ENRICHMENT. Enter in a bargain (hypo), one to build house for another. Client refuses to pay after completion.

o Land before was $500ko Now it is $2 mil.o $1.5 mil Restitution damages.

Specific performance – court order to perform. Sometimes one is entitled, or there is possibility, for specific performance. When expectation damages.